Equatorial Resources has acquired a strategic 19.9% interest in African Iron through the purchase of 95.4 million shares in the company to develop its iron projects in the Republic of Congo.

Equatorial Resources purchased 13.9 million shares on market for a total cash consideration of USD 3.4 million. Also, 81.5 million shares have been purchased off market for a consideration of 11.4 million shares in Equatorial at the rate of one share per 7.16 shares in African Iron.

The Equatorial shares will be issued subject to shareholder approval to be sought shortly. African Iron is the holder of an 80% interest in the Mayoko-Lekoumou Iron Project which lies adjacent to Equatorial 100% owned Mayoko-Moussondji Iron Project in the Republic of Congo.

Significantly, the two projects are intersected by a bulk haulage railway line that leads directly to the deep water port of Pointe-Noire.

Mr John Welborn managing director and CEO of Equatorial said "In the longer term we see a number of positive synergies between our two iron projects afforded by their close proximity and their strategic access to operational transport infrastructure.”

He added that "It is not our current intention to make a takeover bid for African Iron as we continue to focus on adding value to our 100% owned Mayoko-Moussondji and Badondo Iron Projects."

Equatorial said it will continue to cooperate with African Iron on a number of positive operational initiatives at Mayoko and within the Republic of Congo.

The two companies aim to become major players in the development of the globally significant iron ore province in the Central African country.
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(Sourced from www.proactiveinvestors.com.au)